Project Summary Hip and knee replacements improve function and quality of life for people with severe arthritis, yet there have been long-standing racial disparities in the use and outcomes of these surgeries. Black Americans are about 40-50% less likely to receive hip or knee replacements (also called lower extremity joint replacements, or LEJR) than whites. Even if they receive LEJR, black patients are more likely to have complications leading to readmissions or death. Despite national awareness of this issue, this disparity persists. In April 2016, Medicare implemented the Comprehensive Care for Joint Replacement (CJR) model, a program that may substantially affect racial disparities in LEJR. The CJR, Medicare's first mandatory bundled payment program, represents an ambitious attempt to move away from the predominant fee-for-service system with the potential to serve as a model for future payment systems. Under CJR, hospitals are accountable for the cost of care for 90 days after patients with LEJR are discharged. An innovative component of CJR is that it is being implemented in 67 randomly selected metropolitan statistical areas (MSAs). This design provides a unique opportunity to estimate the causal effect of this payment reform. The CJR program may have a profound effect on racial disparities. CJR does not adjust for patients' socioeconomic status when they set target payment rates. This may lead hospitals to avoid admitting LEJR patients with more complex social service needs during recovery. Since a disproportionately high percentage of those patients may be black, existing disparities in the receipt of LEJR could be exacerbated. On the other hand, once the decision is made to provide LEJR, hospitals and post-acute care providers under CJR face new incentives to work together to improve care coordination for high-needs patients. These changes may reduce racial disparities in post-acute care following LEJR and patient outcomes of LEJR. Our proposed research makes use of the unique randomized design of the CJR program to assess its effects on black-white disparities in LEJR. Our central hypothesis is that CJR increases disparities in the receipt of LEJR, but reduces disparities in the quality of post-acute care following LEJR and patient outcomes of LEJR. Specifically, this proposal aims to assess the effect of the CJR program on black-white disparities 1) in the receipt of LEJR, 2) in post-acute care following LEJR, and 3) in patient outcomes of LEJR. To assess the effects of the CJR program, we will use Medicare claims to conduct difference-in-difference-in- differences regressions to examine the effects of CJR on racial disparities at hospitals located in MSAs affected by CJR relative to hospitals in comparable MSAs elsewhere. Accomplishing these aims will provide critical knowledge for payment reforms designed to decrease racial disparities not only in LEJR but in health care more broadly.